Unemployment Rates and Recruiting

Ask most anyone, and they will likely tell you that recruiting must be bad like the rest of the economy these days because there is just so much unemployment recruiters cannot possibly make any money. This might just seem logical to the masses, but in reality the numbers show a much different story.

Search Entrepreneurs that are connected to the right like minded individuals and networked with sources within the recruiting industry have enough feedback and knowledge (as well as first hand metrics) to know recruiting is essentially immune to the effects of a recession.

Personally, I like to follow some of the industry experts that have recruited during multiple recessions over the last 30 years because they tend to be the most reliable sources of information on what the realities of recruiting in these conditions are. Further, they can attest to the life cycle of economic impact on recruiting and what happens as we inevitably pull out of the recession!

What I know from following seasoned veterans like Steven Finkel, Doug Beabout and Bob Marshall is that a good search entrepreneur will be able to successfully navigate a recession profitably if they focus on the right objectives.

When working a recruiting desk myself, I always carried around the rationale that even when unemployment hits 10%, there is still 90% of the population that is working – so go recruit them! Many of them will be open to an opportunity that will provide a personal, professional or financial bump for themselves and their family.

In addition to the above listed industry experts, I also tend to follow other experts that provide cutting edge services and information to the recruiting industry – individuals like Shally Steckerl. I discovered Shally when I was running a research firm and he stood out as one of the few individuals that had figured out a lot of cool things about searching for the right information that would benefit the recruiting process (hence his title as Chief CyberSleuth) and he continues to bring new and interesting ideas to the table.

Recently, Shally wrote on his blog about an unemployment article from one of his buddies that just happened to be the one and only Bob Marshall, recruiting icon from my days with Management Recruiters International. Small world – Bob is one of those respected veterans of the recruiting industry that is a true search entrepreneur. Bob Marshall does a lot of speaking and training these days, and has a section on his website about the Bureau of Labor and Statistics (BLS) numbers that came out this past quarter that were very interesting and realistically supported my thoughts about recruiting during a recession, but also gave hard metrics to the entire topic in much greater detail.

Essentially, the article states that the BLS published an unemployment rate of 9.507% which is really scary until you dig into the numbers and come up with some interesting highlights. First of all, that unemployment rate is for ALL workers in the country. Bob goes on to extrapolate that as recruiters we tend to focus on and recruit mostly “management, professional and related types of workers.” That unemployment rate is only 5%. Further, most of us recruit individuals with college degrees and that rate is sitting at only 4.5%.

This was the most impactful section from Bob’s analysis that Shally included in this blog post: “Now stay with me a little longer. This gets better. It’s important to understand (and none of the pundits mention this) that the unemployment rate, for many reasons, will never be 0%, no matter how good the economy is. Without boring you any more than I have already, just let me add here that Milton Friedman (the renowned economist), is famous for ‘the theory of the natural rate of unemployment’ or NAIRU. This theory states that full employment presupposes an ‘unavoidable and acceptable’ unemployment rate of somewhere between 4-6% with it. So, you see, in our main category of management, professional and related types of potential recruits, and/or our other main category of college-degreed potential recruits, we have no unemployment! None! Zilch! That’s why we have to recruit these folks.”

That, in and of itself, is great news for the search entrepreneur. For recruiters, the bottom line advice here is to stay focused and don’t let the constant negative from the media get you down because the true veterans of this industry are still making it happen. Stay focused on the nuts and bolts of recruiting and you will find that there is opportunity out there for you.

What is even more exciting is that following every recession over the last 30 years, there is a huge upswing in earning potential. Don’t take my word for it, research and read up on some of the top recruiting icons I have mentioned in this article. If you take the time to become better informed, you will see that this has happened in every recovery.

Recruiting is good right now, but in the coming years it will only get better – enjoy the ride!